How to Get an Assumable Mortgage: Step-by-Step Guide (2026)

Here's exactly how to get an assumable mortgage in 2026: find a home with an existing FHA or VA loan, get pre-qualified through that loan's servicer, and cover the equity gap between the purchase price and the remaining loan balance with cash or a second mortgage. The process takes 45 to 90 days and requires lender approval, but you walk away with the seller's original rate. Right now, that could mean a rate in the 2s or 3s instead of today's 6.8%.

That's not a typo. That's how this works.

Why This Matters Right Now

Mortgage rates are sitting above 6.8% as of early 2026. At that rate, a $500,000 loan costs $3,260 per month in principal and interest.

That same $500,000 loan at 3.25% costs $2,176 per month.

That's $1,084 less every single month. Over 30 years, you're looking at roughly $390,000 less in interest paid.

Here's the part most buyers don't know: there are approximately 6 million homes in the U.S. with assumable FHA or VA loans carrying rates below 4%. These loans are locked in from the 2020 to 2022 window when rates were at historic lows. The sellers who bought or refinanced during that window are now selling, and their rate can transfer to you.

You don't need special connections. You don't need to be a veteran (for most deals). You just need to know how the process works.

That's what this guide is for.

Step-by-Step: How to Get an Assumable Mortgage

Step 1: Find a Home With an Assumable Loan

Not every home qualifies. You're looking specifically for properties with existing FHA loans or VA loans, since those are assumable by law. Conventional loans almost never are.

When you're searching, you can filter MLS listings by loan type if your agent knows how to pull that data. You can also browse our assumable homes listings, which are pre-filtered for FHA and VA properties across Colorado.

VA loans carry some of the lowest rates from that 2020-2022 window. There are also non-veterans who can assume VA loans, more on that in a moment.

Step 2: Verify the Loan Is Assumable

Just because a home has an FHA or VA loan doesn't mean the seller is ready to move forward with an assumption. You need to confirm a few things:

• The loan is in good standing (no missed payments)
• The seller's lender (servicer) allows assumptions, which they all do for FHA and VA, but some servicers are harder to work with than others
• For VA loans: whether the seller is willing to leave their VA entitlement with the property (this is what allows non-veterans to assume)

FHA loans are open to anyone who qualifies. VA loans can also be assumed by non-veterans, but only if the veteran seller agrees to leave their entitlement attached to the home. About 10 to 20% of VA sellers will say yes to this when asked. We call those sellers VA hand-raisers.

Step 3: Get Pre-Qualified for the Assumption

This is different from getting pre-approved for a new loan. You're qualifying through the servicer that holds the seller's loan, not through your own lender.

What you need:

• FHA loans: Generally a 620+ credit score, debt-to-income ratio at or below 43%
• VA loans: More flexible credit requirements. DTI threshold is typically 41%, but servicers using automated underwriting can go higher
• Income documentation, tax returns, bank statements

Pre-qualification is usually a soft credit pull, so it won't impact your credit score. It's valid for about 6 months.

One important note: use a lender or assumption processor who knows assumable qualifications. Standard lenders often give bad guidance here because they're used to originating new loans. The qualification process is genuinely different.

Step 4: Handle the Equity Gap

This is the one that stops most buyers, so let's be direct about it.

The equity gap is the difference between what the home sells for and what the seller's remaining loan balance is. If a home sells for $450,000 and the loan balance is $380,000, you've got a $70,000 equity gap. That's your down payment equivalent.

Options to cover it:

• Cash from savings or checking
• HELOC on a property you already own
• Gift funds from family, employer, or a close friend (documented)
• Gap loan or second mortgage (we work with lenders who do exactly this for assumptions)
• Retirement account loan to yourself (401k)
• Seller financing in some cases
• Down payment assistance programs

We work with a second mortgage program through Roam that allows buyers to put as little as 10% of the purchase price out of pocket on a primary residence. So on that $450,000 home, you could be looking at $45,000 total instead of coming up with $70,000 in cash. We'll break this down further below.

Step 5: Submit the Assumption Application

Once you're pre-qualified and have a purchase agreement, the assumption application goes directly to the seller's loan servicer. The seller has to authorize the assumption process to begin.

You'll need to submit:

• Completed assumption application
• Pay stubs and W-2s (or two years of tax returns if self-employed)
• Bank statements (2-3 months)
• Documentation of down payment funds
• Government-issued ID

Your assumption processor handles the back-and-forth with the servicer. This is not the time to go it alone. Servicers add friction. They'd rather originate a new loan because that's how they make their money. An assumption processor knows how to push through that friction.

Step 6: Lender Review and Approval

This is where patience matters. The servicer's assumption department reviews your file, and the timeline depends heavily on which servicer you're dealing with.

Typical ranges:

• Veterans United: 45 to 72 days
• Planet Home Lending: 60 to 90 days
• Freedom Mortgage: 75 to 90 days
• Most servicers: 60 to 90 days

Things that speed it up: being responsive, having all documents ready upfront, and working with an assumption processor who has relationships with these departments. Roam, for example, has a 45-day guarantee on deals they process.

Once your file is approved, you'll get a clear to close within 3 to 7 business days.

Step 7: Close

Closing on an assumable mortgage looks similar to a traditional close. You'll sign documents, pay closing costs, and the loan officially transfers into your name.

Expect closing costs of $5,000 to $10,000. This includes:

• Assumption processor fee: typically 1% of the purchase price
• Standard title and escrow fees
• VA funding fee if applicable (0.5% of the loan amount for assumptions)

The seller is fully released from liability once the loan transfers. Their credit is not impacted. The loan is now yours at the original rate.

FHA vs. VA Assumable Mortgages: Key Differences

| | FHA | VA | |---|---|---| | Who can assume | Anyone who qualifies | Anyone, if seller leaves entitlement. Veterans only for entitlement substitution. | | Credit requirement | 620+ typical | Flexible, no hard minimum | | DTI limit | 43% | 41% (can go higher with AUS) | | Funding fee | None | 0.5% of loan amount | | Owner-occupancy required | No | Depends on servicer and entitlement | | Best for | First-time buyers, general buyers | Military communities, Colorado Springs area |

The big VA nuance: if the seller leaves their entitlement with the loan (not requiring substitution), a non-veteran can assume and even use it as an investment property with some servicers. If a veteran buyer substitutes their own entitlement, they must owner-occupy.

The Equity Gap: The Number One Question Buyers Have

Most buyers who learn about assumable mortgages immediately ask: what about the equity gap?

Fair question. Here's how it actually works.

Say you're buying a home in Colorado Springs listed at $425,000. The seller has a VA loan balance of $355,000 at 2.8%. Your equity gap is $70,000.

Option 1: Cash. If you have $70,000 available, straightforward. Pay it, close, done.

Option 2: Gap loan / second mortgage. We work with lenders doing second position loans for assumable deals. On a primary residence, the minimum is currently 10% of the purchase price. On that $425,000 home, that's $42,500 out of pocket. The servicer handles the $355,000 first mortgage at 2.8%. Your gap lender covers the remaining $27,500 at a higher rate (typically a HELOC structure). You're blending two rates, but your blended payment is almost always far below what a brand new loan would cost.

Option 3: HELOC on another property. If you already own a home with equity, you can pull a HELOC and use it as your down payment on the assumption.

Option 4: Gift funds. A family member can gift you the equity gap. FHA and VA both allow gift funds with proper documentation.

Let's run the real math on the Colorado Springs example above:

• $425,000 home, seller's VA loan at 2.8%, balance $355,000
• Buyer brings $42,500 cash (10%), borrows $27,500 via second mortgage
• First mortgage payment on $355,000 at 2.8%: approximately $1,460/month
• Second mortgage on $27,500 (HELOC at roughly 8-9%): approximately $185/month
• Total: around $1,645/month

Compare that to a new loan on $425,000 at 6.8%: approximately $2,768/month.

That's over $1,100/month in savings. Even with the higher-rate second mortgage, you're winning by a wide margin.

How Long Does It Take?

Plan for 45 to 90 days from accepted offer to close. That's longer than a conventional purchase, which typically closes in 30 days.

The timeline varies based on:

• Which servicer holds the loan. Freedom Mortgage is one of the slowest (75 to 90 days minimum). Veterans United tends to be faster (45 to 72 days).
• How quickly you respond. If the servicer sends a document request and it takes you two weeks to respond, the clock stops.
• Whether you're using an assumption processor. Working with someone like Roam can compress the timeline significantly. They have existing relationships with servicers and know exactly what each one wants.
• How clean your file is. Gaps in income history, unusual assets, or documentation issues slow everything down.

The wait is real. But you're waiting for a rate that saves you $1,000+ per month for the life of the loan. Most people find it worth it.

Why Work With a Specialist?

Here's the honest answer: most real estate agents and lenders have never closed an assumable mortgage. Some have never even heard of one. That's not an insult. It's just the reality of a niche that went dormant for 20 years when rates were low.

When you try to do this with a general agent, you run into problems. They don't know which servicers are buyer-friendly. They don't know how to structure the equity gap. They don't know how to talk to a listing agent who's never done an assumption. And they definitely don't know the VA entitlement rules that determine whether a non-veteran can assume a specific loan.

Ryan's team at The Assumable Guy has closed 150+ assumable transactions. We maintain a database of assumable properties across Colorado's Front Range, we keep a list of VA hand-raisers (sellers willing to let non-veterans assume), and we work with assumption processors who push deals through lender bureaucracy every week.

We also work with buyers in Denver, Aurora, and across Colorado. If you're buying anywhere on the Front Range, we can help.

This isn't theoretical. We close these deals every week.

Frequently Asked Questions

Can anyone assume an FHA loan?

Yes. FHA loans are assumable by anyone who meets the qualification requirements. You do not need to be a first-time buyer, a veteran, or have any special status. You need to qualify through the servicer (credit score, DTI, income) and get lender approval. That's it.

Do you need to be a veteran to assume a VA loan?

No. Anyone can assume a VA loan if the veteran seller is willing to leave their VA entitlement with the property. About 10 to 20% of VA sellers agree to this when asked. Non-veterans can assume the loan and, with some servicers, even use it as an investment property. If a veteran buyer wants to substitute their own entitlement to free up the seller's, they must owner-occupy.

What credit score do you need to assume a mortgage?

There is no universal minimum credit score requirement for assumptions, but in practice, lenders look for 620+ on FHA deals. VA is more flexible. What matters more is the reason behind a low score. If your score is low because of missed mortgage payments or unresolved collections, that will likely disqualify you regardless of the number. A good assumption processor can help you assess your position before applying.

How much cash do you need for an assumable mortgage?

It depends on the equity gap. On a home where the loan balance is close to the purchase price, you might need very little. On a property with significant appreciation, the gap can be $50,000 to $150,000 or more. With a gap loan or second mortgage on a primary residence, you can typically get in with 10% of the purchase price out of pocket, plus closing costs of $5,000 to $10,000. Some deals have been closed with as little as $15,000 to $16,000 total.

How long does mortgage assumption take?

Most assumptions close in 45 to 90 days. The servicer's efficiency is the biggest variable. Veterans United tends to move faster. Freedom Mortgage is one of the slower ones. Working with an assumption processor who has existing servicer relationships can meaningfully compress the timeline, and some processors offer a 45-day guarantee.

What happens to the seller's credit when a mortgage is assumed?

Once the assumption is complete, the seller is fully released from liability on the loan. The debt no longer shows on their credit. Their credit score is not impacted. The one thing to understand on VA loans: if the buyer assumes with the seller's entitlement remaining with the loan (rather than a veteran substituting entitlement), the seller's VA entitlement stays tied to that loan until it's paid off. They can still buy another home using their remaining entitlement.

Ready to Get Your Assumable Mortgage?

Browse available listings or schedule a free call with Ryan Thomson, Colorado's assumable mortgage specialist with 150+ closings.

Browse Assumable Homes | Schedule a Free Call | (719) 624-3472

Want to run the numbers on a specific property? Use our Assumable Mortgage Calculator to see what your monthly payment and total interest savings would look like.

Questions about buying in a specific market? Start with Colorado Springs, our home base and one of the best markets in the country for VA assumable loans near Fort Carson and Peterson SFB.

Ryan Thomson Licensed Colorado Real Estate Agent | The Assumable Guy ryan@TheAssumableGuy.com | (719) 624-3472